OLMSTED FALLS, Ohio -- City Council earlier this summer approved the creation of Olmsted Falls’ first budget stabilization fund.
“The rainy day fund allows the city to maintain adequate reserves within the general fund to mitigate future financial risks,” Olmsted Falls Mayor James Graven said. “This will provide additional transparency and fiscal responsibility within the city’s annual budget.”
Olmsted Falls Finance Director Cory Swaisgood added, “What it does is provides another level of prudent fiscal policy within municipal government, so the city can begin reserving funds for future economic downturns or budgetary shortfalls. It’s a restricted pot of money, if you want to call it that.”
Under the Ohio Revised Code, certain parameters guide the budget stabilization fund, including annual transfers not exceeding 5 percent of the total general fund revenue.
As for its use, the rainy day fund can go toward any type of operating expense in the city.
“Those parameters are important to show that the city is being fiscally responsible with excess general fund monies and saving it for uses in the future that would not require the city to go back to the taxpayers for additional monies,” said Swaisgood, who noted budget stabilization funds became in vogue a decade ago after the state initiated use.
“So other municipalities followed along but I don’t think Olmsted Falls should have done it before because basically the city has been financially strapped for the last eight years. Now I believe the city is in a place they can create this fund and begin reserving funds.”
The other benefit of the rainy day fund has to do with flexibility in regards to adding money.
“It’s an annual decision during the budgetary process if the city feels it can make a transfer into that fund,” Swaisgood said. “It’s up to the mayor and city council to make that decision at that time. There could be years if the city is financially strapped and can’t make that transfer, they don’t have to make it.”
The finance director said the notion of creating a rainy day fund for Olmsted Falls speaks to the city’s current financial position.
“This is showing that the city is moving in the direction where they’re more financially stable than they were in the past,” Swaisgood said. “This provides that level of maturity for the city going forward if there are any changes in elected officers. This policy will be set.”
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Olmsted Falls City Council approves rainy day fund creation - cleveland.com
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